CMS 'overpayment' rule may come at a greater cost
If fully adopted, the rule would significantly expand the liability of healthcare providers and suppliers under the federal False Claims Act, and change the way that all health care organizations address compliance and post-payment audits.
In the proposed rule, CMS makes clear that providers and suppliers have not only an obligation to self-report known overpayments, but also a responsibility under certain circumstances to conduct inquiries to confirm the existence of an overpayment. The rule further suggests that providers/suppliers are expected to perform activities to determine whether an overpayment exists, such as self-audits and compliance checks, or risk a claim of reckless disregard or deliberate ignorance of the existence of an overpayment.
In addition, the proposal also provides for a 10-year look-back period for overpayment disclosures, meaning that a provider or supplier is no longer liable for an overpayment that is identified 10 years or more after the overpayment was received.
While this proposal by the agency would give providers and suppliers a reasonable period after which they can close their books for accounting purposes, it may come at a greater cost. To ensure the reopening regulations are consistent with the look-back period, CMS also proposes to amend the reopening rules in a similar fashion to allow a contractor to reopen an initial determination or redetermination within 10 years if the overpayment is reported.
Comments on the proposed rule were due by April 16. [CMS is now reviewing them.] For details about this important rule, please read this legal alert.
Glenn P. Hendrix is a healthcare litigation and regulatory attorney and the Managing Partner at Arnall Golden Gregory LLP, with offices in Atlanta, Washington and Miami.